In recent years, many of us have noticed the rapid expansion of various betting, gambling, and lottery-related services in the Armenian market. But how and when did this story begin? What path did the industry follow, and what lies behind its success?
The answer is iGaming.
The history of iGaming in Armenia dates back to the early 2000s, when the industry operated primarily through traditional land-based bookmakers’ offices, where customers placed paper betting slips on sporting events. However, the real transformation took place during the 2010s, when local companies recognized that the future lay in digitalization and the internet.
Armenia became one of the few countries where domestic startups not only succeeded in serving the local market but also evolved into technology companies exporting software solutions to Europe, Latin America, and Africa.
The success of Armenia’s iGaming industry can largely be attributed to several key factors: the country’s strong mathematical tradition, its highly skilled and concentrated IT talent pool, and, particularly during the industry’s early stages, a relatively liberal regulatory environment that encouraged innovation and growth.
Undoubtedly, participation in the iGaming industry has experienced significant growth among the Armenian population. Society is becoming increasingly involved in the sector both as consumers and as members of the workforce, while the educational opportunities available in this field continue to expand, creating even greater prospects for future development.
To better understand the industry’s potential, it is essential to examine the legal framework governing iGaming operations, the advantages of conducting such activities, and the future prospects of the sector within the Armenian market.
First and foremost, the iGaming industry encompasses all forms of online betting, gambling, and lottery activities conducted via the internet using computers, smartphones, or any other digital devices. These include sports betting, online casinos, slot games, poker, lotteries, and similar gaming products.
The iGaming ecosystem generally operates under two principal business models: Business-to-Consumer (B2C) and Business-to-Business (B2B).
1. Business-to-Consumer (B2C) Model
The B2C segment consists of companies (operators) that own and operate online gaming platforms and provide gambling services directly to end users (players). These operators accept bets, manage player accounts, and pay out winnings.
2. Business-to-Business (B2B) Model
The B2B segment comprises technology providers that do not offer gambling services directly to players. Instead, they develop and supply software solutions, gaming platforms, slot games, sportsbook systems, payment solutions, and back-office services to licensed gaming operators (B2C companies). These products and services are supplied not only within Armenia but also to operators across international markets.
Although the Armenian government has, in recent years, adopted a policy of stricter regulation and increased taxation aimed at curbing problem gambling and strengthening oversight of the industry, Armenia nevertheless remains an attractive jurisdiction for the iGaming sector to develop and expand its operations.
At present, iGaming activities are permitted in Armenia only through licensed operators.
The principal legal requirements for conducting iGaming business in Armenia include the following:
- The company must be incorporated and registered in Armenia.
- It must obtain the appropriate operating licence.
- It must pay the applicable state duties and licensing fees.
- It must comply with technical, cybersecurity, and information security requirements.
- It must implement Know Your Customer (KYC) procedures and Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance measures.
- It must submit periodic reports and other mandatory disclosures to the competent state authorities.
These requirements are intended to ensure the integrity of the industry, protect consumers, and maintain compliance with both national regulatory standards and international anti-money laundering obligations.
As noted above, companies wishing to operate in Armenia’s iGaming sector must first obtain the appropriate operating license. The license is issued by the Ministry of Economy of the Republic of Armenia upon review of an application submitted through the government’s electronic Yes Em platform.
The principal legislative acts governing the sector include the Law of the Republic of Armenia on Gambling Games, Online Gambling Games and Casinos and the Law of the Republic of Armenia on Licensing.
In addition, the Law of the Republic of Armenia on State Duty establishes the applicable state fees for obtaining gaming licenses. The annual licensing fees are calculated as multiples of the statutory base duty and are set as follows:
- Lotteries – 100,000 times the statutory base duty per year;
- Prize-winning games conducted at each physical venue – 5,000 times the statutory base duty per year;
- Casinos operating at each physical venue – 25,000 times the statutory base duty per year;
- Online gambling (iGaming) – 100,000 times the statutory base duty per year.
As can be seen, the state duties applicable to gaming licences are substantial. Nevertheless, Armenia continues to attract both domestic and international market participants due to its well-developed technological ecosystem, highly skilled workforce, and favorable business environment.
At the same time, the Armenian government, acting through its competent regulatory authorities, exercises rigorous oversight of the sector in order to prevent unlicensed and shadow operations, ensure regulatory compliance, and promote transparency and integrity within the industry.
With regard to taxation, iGaming companies in Armenia are generally subject to the following types of taxes:
- Corporate profit tax;
- Personal income tax (for employees);
- Value Added Tax (VAT), depending on the nature of the transaction;
- State duties and licensing fees;
- Special tax payments applicable specifically to gambling activities.
In recent years, the tax burden on the sector has been significantly increased. Licensing fees have been raised, and additional tax mechanisms have been introduced for certain types of gaming activities. At the same time, the state has also established specific tax exemptions.
In particular, according to Article 64 of the Tax Code of the Republic of Armenia, transactions and operations related to gambling activities (including online gambling), totalizators, and online totalizators are exempt from VAT.
Furthermore, Article 147 of the Tax Code defines certain non-taxable income for the purpose of determining the taxable base. These include:
- Monetary and in-kind winnings received by participants in promotional lotteries, provided that each individual prize does not exceed 50,000 AMD;
- Winnings from draw-based, non-draw-based, and combined lotteries, as well as winnings from totalizators;
- Winnings received in casinos, gambling games, and online gambling activities, in accordance with the procedures and conditions established by Armenian legislation.
Advertising of gambling services is generally prohibited in the following channels and locations:
- Television (with limited exceptions where expressly permitted by law);
- Radio;
- Outdoor advertising billboards;
- Public transportation;
- Street LED screens;
- A wide range of online platforms, where such advertising does not comply with applicable legal requirements.
At the same time, advertising is permitted only in strictly defined contexts, including:
- The official website of the operator;
- Inside or directly on the premises of casinos or betting shops;
- At border checkpoints of the Republic of Armenia;
- In hotels of at least four-star category.
In addition, advertising content is subject to mandatory age-related warnings, such as “18+” or “21+”, depending on the type of activity.
Overall, the iGaming sector is subject to a comprehensive regulatory framework aimed at preventing illegal activity and ensuring public safety. At the same time, Armenia continues to position itself as a flexible and competitive jurisdiction for iGaming, supported by a highly skilled workforce and a wide range of future development opportunities.
Legal Disclaimer
This article is published for informational purposes only and does not constitute legal advice. The information reflects our understanding of the relevant legal frameworks as of the date of publication and is subject to change. Readers should not act or refrain from acting on the basis of this article without obtaining specific legal advice tailored to their circumstances. Retrieve Legal & Tax accepts no liability for decisions taken in reliance on its contents.